Correlation Between United Guardian and Bridgford Foods
Can any of the company-specific risk be diversified away by investing in both United Guardian and Bridgford Foods at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining United Guardian and Bridgford Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Guardian and Bridgford Foods, you can compare the effects of market volatilities on United Guardian and Bridgford Foods and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in United Guardian with a short position of Bridgford Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Guardian and Bridgford Foods.
Diversification Opportunities for United Guardian and Bridgford Foods
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and Bridgford is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian and Bridgford Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgford Foods and United Guardian is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on United Guardian are associated (or correlated) with Bridgford Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgford Foods has no effect on the direction of United Guardian i.e., United Guardian and Bridgford Foods go up and down completely randomly.
Pair Corralation between United Guardian and Bridgford Foods
Allowing for the 90-day total investment horizon United Guardian is expected to under-perform the Bridgford Foods. In addition to that, United Guardian is 1.83 times more volatile than Bridgford Foods. It trades about -0.42 of its total potential returns per unit of risk. Bridgford Foods is currently generating about 0.06 per unit of volatility. If you would invest 903.00 in Bridgford Foods on August 27, 2024 and sell it today you would earn a total of 18.00 from holding Bridgford Foods or generate 1.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Guardian vs. Bridgford Foods
Performance |
| Timeline |
| United Guardian |
| Bridgford Foods |
United Guardian and Bridgford Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Guardian and Bridgford Foods
The main advantage of trading using opposite United Guardian and Bridgford Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Guardian position performs unexpectedly, Bridgford Foods can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bridgford Foods will offset losses from the drop in Bridgford Foods' long position.| United Guardian vs. Utah Medical Products | United Guardian vs. Union Bankshares | United Guardian vs. Psychemedics | United Guardian vs. Unity Bancorp |
| Bridgford Foods vs. Seneca Foods Corp | Bridgford Foods vs. J J Snack | Bridgford Foods vs. Central Garden Pet | Bridgford Foods vs. Central Garden Pet |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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